MILAN, November 11 (Reuters) -Kering and investment fund Mayhoola have agreed to inject 100 million euros ($117 million) into Valentino to shore up the Italian fashion house's finances after it
Kering and Mayhoola to Invest €100 Million in Valentino's Recovery
Valentino's Financial Challenges and Investment Plans
MILAN, November 11 (Reuters) -Kering and investment fund Mayhoola have agreed to inject 100 million euros ($117 million) into Valentino to shore up the Italian fashion house's finances after it breached loan covenants earlier this year, according to a corporate document and two sources familiar with the matter.
Details of the Investment Agreement
Valentino is controlled by holding company MFI Luxury Srl, in which Qatar-backed Mayhoola holds a 70% stake and French luxury conglomerate Kering owns the remaining 30%.
Valentino's Recent Financial Performance
Kering acquired the stake in Valentino for 1.7 billion euros in 2023, with a commitment to fully take over the brand from Mayhoola.
Future Prospects for Valentino
MFI Luxury Srl agreed to inject the capital by December 10 in two tranches, according to minutes from a shareholder meeting held on October 16 reviewed by Reuters.
A pool of banks that last year extended a 530 million euro loan to Valentino requested additional cash from its investors after the fashion house failed to comply with certain terms of the financing agreement, two sources familiar with the matter said.
Kering declined to comment. Mayhoola did not immediately respond to a request for comment.
VALENTINO'S FINANCIAL STRUGGLE
Valentino, which has been grappling with declining profitability and rising debt while global luxury goods demand slowed, signed the loan agreement in 2024 with lenders Intesa Sanpaolo, Banca Nazionale del Lavoro-BNP, Monte dei Paschi di Siena, Banco BPM and Italy's state-backed investment fund Cassa Depositi e Prestiti (CDP).
The financing, which matures in July 2029, originally included a financial covenant based on a leverage ratio, to be reviewed every six months.
The two shareholders have been discussing a further equity commitment of 150 million euros, Italian daily Il Messaggero reported in October, without giving further details.
In September, under new CEO Luca de Meo, Kering said it would delay the full acquisition of Valentino until at least 2028, under revised terms agreed with Mayhoola.
Valentino's revenue fell 2% at constant exchange rates to 1.3 billion euros in 2024 from a year earlier. Its core earnings (EBITDA) dropped 22% to 246 million euros, according to company filings. Debt, calculated including lease liabilities, stood at around 1 billion euros at year-end.
($1 = 0.8575 euros)
(Reporting by Elisa Anzolin and Andrea Mandala; Editing by Lisa Jucca)
